Eleven Consumers Are Trying to Decide Whether to Connect to a New

question 13

Multiple Choice

Eleven consumers are trying to decide whether to connect to a new communications network.Consumer 1 is of type 1, consumer 2 is of type 2, consumer 3 is of type 3, and so on.Where k is the number of consumers connected to the network (including oneself) , a consumer of type n has a willingness to pay to belong to this network equal to k times n.What is the highest price at which 9 consumers could all connect to the network and either make a profit or at least break even?

• A)$30
• B)$9
• C)$18
• D)$24
• E)$27

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Definitions:

Cyclical Effects

Economic or market changes that occur in predictable cycles, often related to changes in business activity, interest rates, and economic policies.

Weekly Seasonal Indexes

Indicators that measure the variability in data or phenomena on a weekly basis to account for and predict seasonal variations.

Moving Average

A method used to smooth out short-term fluctuations and highlight longer-term trends or cycles in data, by averaging data points over specific periods.

Regression Trend Line

A statistical technique that attempts to determine the relationship between two or more variables by fitting a linear or non-linear line that best approximates the data.